Oracle to Make SaaS Push

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BOSTON (Reuters) – Oracle Corp, the world’s No. 2 business software maker, plans to expand its small line of programs that companies access via the Web, said a person familiar with the strategy.

The person, who was not authorized to publicly discuss the plan, said that Oracle is developing Internet-based programs to help businesses manage human resources functions including employee recruitment.

The company is also expanding its line of customer relationship management software, or CRM programs, which companies use to manage sales and marketing activities, the person said.

Those CRM programs compete with ones from Salesforce.com Inc, the biggest provider of Web-based programs, which are known in the tech industry as software as a service or SaaS.

SaaS is becoming increasingly popular because their makers host the programs at their own data centers, saving customers the costs of running them on their own computers. The approach also makes it quicker and easier for companies to start using the new software.

Oracle has briefed some industry analysts on its plans to expand its SaaS offerings, though it is not clear when the products will be released, said the person who described the strategy.

A spokeswoman for Oracle declined comment.

Oracle Chief Executive Larry Ellison is a strong proponent of SaaS. Last year, he said that Oracle’s small SaaS division had turned its first profit.

Ellison is also the founder and majority owner of NetSuite Inc, a company that sells accounting programs to small and mid-sized businesses. He has told investors that Oracle’s SaaS unit is one of its fastest-growing businesses.

A new Web-based human resources product from Oracle could threaten sales of several smaller firms that have already gotten into the market. They include Kenexa Corp, SuccessFactors Inc, Taleo Corp and privately held Workday.

The Wall Street Journal earlier reported on Oracle’s development plans.